Which is harder?

[henry766]

I beg to differ jimbo ,7( winners) -3 (losers)=4 ,or am i missing something? utter nonsense?

 

[jimbo57]

[.

 

[henry766]

The world is full of broke traders winning 9 times out of 10, of course you can come up with ridiculous scenarios where this loses , but the point i made is valid , the profit factor of ones trades is by far the most important , you said your money management is key , well you keep your money management , you sound smart enough to make it work at something like roulette , i'll take 9 out of 10 winners thanks , if i want to be safe winning 9 out 10 i just risk 5% , there done problem solved , now you tell me how you win 9 times out 10 with equal win loss size .

 

[damianoakley]

This thread's strayed a bit from the original question, but here's my ten pence worth:

Most traders I come across place great importance in a high winning strike rate. They think that a system that produces 70% winning trades is better than a system with 60% winning trades.

Some of the most profitable systems actually have a winning strike rate of just 35%, they lose small amounts of money most of the time, but when they win, they win big. And that big win pays for all the small losses and still shows a profit at the end.

But trading systems like this are difficult for humans to trade because it's human nature to want to be right regularly. Most people would actually prefer to trade a system with 70% winning trades even if over time it proved less profitable than the 35% system.

Short-term scalping tends to give traders this feeling of being right a lot, which is why many people attempt this sort of trading. It feels great to bank a small profit when it's there in scalping, whereas it's less pleasant to hold a position for a few days patiently watching it go up and down. But it's this patient waiting that allows you to really ride your big winners to profit.


Thanks

Damian

 

[jimbo57]

.

 

[henry766]

well if you stick with money management instead of profit factor , it will never come for you , p.s. i'm not your friend .

 

[jimbo57]

[.

 

[andycan]

Again quite so, so many poster's go on about money management
money management in essence is the single most important aspect of trading

searching for the holy grail naive and stupid
there is nothing wrong in searching for perfection we all aspire it none achieve it but some get as close as humanly possible

the single most important thing you need by a factor of approximately a million is a truly profitable trade
a profitale trade is subjective let me explain if you make 1 handle in bonds but risk 2 then yes you have made $1000 a contract but you were willing to risk $2000 for that $1000 that is not a good trade and certainly that approach will get you in the dog house
if on the other hand you risked 1/3 of a handle then your return is 3 times what you risked as opposed to risking twice the money to make half
basically when it all works out its all good its when it doesn't thats when you see the cracks
when one trades we ask these questions or a variation of it

1/ what is the direction of the trend
2/where am i going to enter the trade
3/what is my goal (minimum objective)
4/where am I wrong or where is my stop going to go initially

and by far the most important of them all is Can i afford this trade?? is the RISK within my paramenters

Andy

 

[damianoakley]

hi andy,

all very nicely put.


Damian

 

[henry766]

Your definition of a truly profitable trade and mine are different , for me it's one where after a million trades it gets you out ahead , that is a truly profitable trade , as for risk , that will have been accounted for in the million trades , this is a truly profitable trade ,and it is the only thing that counts if you want to win in the end , you can't win ,in the end ,unless you have this , even with the best money management the world has ever seen.Again as for risk , if you trade is "truly profitable " the risks you run diminish , but if you don't have a truly profitable trade and have perfect money management your risk is 100% , because if your trade isn't truly profitable it is only the number of trades it takes to lose it all that you can vary .

 

[jimbo57]

Your definition of a truly profitable trade and mine are different , for me it's one where after a million trades it gets you out ahead , that is a truly profitable trade , as for risk , that will have been accounted for in the million trades , this is a truly profitable trade ,and it is the only thing that counts if you want to win in the end , you can't win ,in the end ,unless you have this , even with the best money management the world has ever seen.Again as for risk , if you trade is "truly profitable " the risks you run diminish , but if you don't have a truly profitable trade and have perfect money management your risk is 100% , because if your trade isn't truly profitable it is only the number of trades it takes to lose it all that you can vary .

I don't know what you are smoking Henry, but its not hitting the right spot!

Read what I said, think about it, have a sleep and come back in the morning with a little more thought.

 

[henry766]

and lose the will to live , no thanks !

 

[jimbo57]

.

 

[andycan]

Henry766
I think i know where you are coming from but to achieve those million trades you have to have employed good risk management and also you have to have a method if we are talking methodology well one certainly has to have a system of sorts its kind of being a racing driver and requiring a race car thats paramount but once you have a race car you have to obey the rules to keep you in the race.
i guess what im saying is that when you initiate a trade nobody knows with 100% certainty that trade is going to be good but what you do know is that you could loose X so system aside money management is priority
but if you dont have a system then you simply have no business trading


Andy